Short Answer
If employees are to move to a new legal employer, the commercial contract alone is not enough.
Section 13 of Thailand’s Labour Protection Act requires employee consent where the change results in the employee becoming an employee of a new employer. Existing employee rights continue, and the new employer assumes the relevant rights and obligations.
The transition therefore needs an employee-level implementation process, not merely a clause saying that the buyer or new operator “takes over the staff.”
Why This Matters
Employee transfer can affect recognised service, future severance calculations, accrued leave, unpaid wages, bonuses, benefits, social-security records and, for foreign staff, immigration and work-authorisation arrangements.
If these items are not reconciled before the operational handover, the old employer, new employer and employees may each have a different understanding of what moved.
The commercial transaction can therefore close successfully while the workforce transition remains incomplete.
Typical Scenario
A business outsources an operating function or sells part of a business.
The employees performing that function are currently employed by the owner or another group company. The commercial agreement says the operator or buyer will take over the staff.
Management asks:
“Is that clause enough to transfer them?”
No.
Practical Analysis
01Identify the current legal employer first.
For each employee, confirm the employer named in the employment records, payroll entity, social-security employer, recognised start date and—where relevant—the employer tied to immigration or work authorisation.
02Obtain employee consent where the employer changes.
The transfer documentation should clearly identify the old employer, new employer, effective date and intended continuity of employment.
03Reconcile accrued rights.
Review continuous service, annual leave, unpaid wages, earned commissions or bonuses, contractual benefits and other service-linked entitlements.
The objective is not to reset the employee to “day one” merely because the business arrangement changed.
04Keep cost allocation between companies separate from employee rights.
The old and new employer may agree who economically bears pre-transfer amounts. That allocation can be useful, but it should not be drafted as though statutory employee rights disappear.
05Plan for employees who do not consent.
The commercial agreement should not promise automatic transfer of 100% of the workforce unless employee consent has actually been addressed.
06Treat foreign employees separately.
Even where the employment transition is agreed, work permits or immigration status may still be linked to the existing employer. Employee consent does not itself update those authorisations.
The transfer date should also be coordinated with payroll and benefit administration. A legally agreed transfer can still create employee disputes if the old employer closes payroll too early, the new employer starts late or leave and benefit balances are not reflected correctly. The legal documents, HR records and payroll cut-off should therefore use the same effective date and the same continuity assumptions.
The transaction documents should also say who communicates with employees and when. Poor sequencing can create uncertainty about whether staff are being asked to consent to a transfer, offered new employment or notified of termination. A coordinated employee communication usually reduces both legal risk and operational disruption at handover.
What We Usually Look At
We review the employee roster, employment contracts, employing entity, recognised service date, payroll, leave and benefit balances, transfer consent, allocation of historical liabilities, social-security records and foreign-employee authorisations where relevant.
Common Traps
Common mistakes are assuming the operating agreement automatically transfers employees, resetting service dates, transferring payroll without reconciling accrued rights, promising a fixed transferred headcount before consents are obtained and moving foreign staff before employer-linked authorisations are ready.
Practical Next Step
Prepare a staff transfer register:
employee → current employer → service date → accrued rights → consent → new employer → payroll cut-off → authorisation issues
The test is not simply whether the new operator agreed to take the staff. It is whether each employee has been lawfully moved with their rights and records intact.
Legal Sources
- Labour Protection Act B.E. 2541 (1998), section 13, as amended, on change of employer and continuation of employee rights.
- Thai Civil and Commercial Code, section 577, on transfer of an employer’s rights and obligations in an employment relationship.
- Supreme Court Judgments Nos. 4239/2563 and 7945/2554, on employee consent and continuation of employment rights when the employer changes.
- Department of Labour Protection and Welfare / Ministry of Labour current guidance on change of employer and accrued employment rights.
General legal information only. Please seek advice on your specific facts. Laws and regulatory practice may change.